Assessing the role of the structure of human capital on the export diversification in 39 oil-producing countries

This article analyzes the effect of the human capital structure on export diversification in 39 oil-producing countries between 1995 and 2019. The estimation methods used are MCOs, GMMs, fixed effects, pooled mean group, and the GETS approach. The results show that the number of engineers measured by the number of students enrolled in the engineering, manufacturing, and construction sectors positively affects the export diversification of oil-producing countries with good governance. On the other hand, in countries where governance is bad (government effectiveness), there is a proliferation of professions related to law, commerce, and social sciences, which harms diversification. Oil-producing countries should therefore improve their government effectiveness to encourage young students to specialize more in vocational courses, which will promote diversification. Our results extend those of Murphy et al. (1991) and Ebeke and al. (2015). They are robust to several estimation methods and the alternative measure of the diversification.